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FM AMEMBASSY MANILA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 6399
RUEHZU/ASIAN PACIFIC ECONOMIC COOPERATION IMMEDIATE

UNCLAS SECTION 01 OF 03 MANILA 000164 
 
SIPDIS 
 
SENSITIVE BUT UNCLASSIFIED 
 
E.O. 12958: N/A 
TAGS: ECON PGOV RP
SUBJECT: Philippine Elections: Favorite Son Hits Softball 
 
REFS: A) Manila 135 (Ambassador-Aquino Farewell Call), B) Manila 60 
(Ambassador-Teodoro Farewell Call), C) 09 Manila 2098 (Price 
Controls in Typhoon Aftermath) 
 
SENSITIVE BUT UNCLASSIFIED 
 
¶1.  (SBU) Summary:  Philippine presidential candidate Senator 
Benigno "Noynoy" Aquino's January 21 luncheon speech to an invited 
audience focused on his economic advocacies and the faults of the 
current Arroyo Administration.  The speech was well-received; no 
surprise given the anti-Arroyo Administration reputation of the 
sponsoring Makati Business Club.  End summary. 
 
¶2.  (SBU) Front-running Philippine Liberal Party presidential 
candidate Senator Benigno "Noynoy" Aquino's January 21 luncheon 
speech to a standing-room-only crowd of about 450 Makati Business 
Club (MBC) members and invited guests marked one of his first 
attempts to sell himself to the powerful business and opinion 
leaders of the national capital region.  In his less than 20-minute 
speech, Aquino laid out a pro-business, pro-market agenda while 
criticizing the current Arroyo Administration.  The speech was 
enthusiastically received and interrupted by applause several times. 
 
 
Makati Business Club 
-------------------- 
 
¶3.  (U) Established in 1981, the MBC is a prestigious non-profit 
organization that serves as a forum for ideas on economic, social, 
and political issues affecting Philippine development.  It has about 
800 chief executive officers and senior executive members 
representing 450 of the largest companies in the country.  The main 
thrust of the MBC is to promote the role of the private business 
sector in national economic development efforts.  The MBC has been 
an outspoken critic of the Arroyo Administration. 
 
Man for the Job? 
---------------- 
 
¶4.  (SBU) Perhaps to counter criticisms about his seeming 
under-performance as a first-term lawmaker, Aquino noted that the 
Philippines did not suffer from a lack of laws but from the weak and 
inconsistent implementation of laws.  He had therefore focused his 
efforts as a senator, he explained, on initiating and participating 
in congressional probes and investigations, including the First 
Family's alleged involvement in bribery by the Chinese ZTE company 
for a cyber education project, the fertilizer scams at the 
Department of Agriculture, anomalous infrastructure projects, and 
accountability for the government's confidential intelligence funds. 
 
 
¶5.  (U) Aquino said that the country's problems are well-known and 
the solutions identified.  He mentioned the deficits of good 
governance, accountability, political will, and commitment to 
national transformation.  He lamented the shrinking middle class and 
the declining education system. 
 
Free and Fair Playing Field for Business 
---------------------------------------- 
 
¶6.  (U) Senator Aquino noted that the Philippines needed to move 
away from inward-looking competitiveness based on cronyism and 
relationships used to obtain favors towards free and fair 
competition that would spur Philippine economic growth in a 
globalized environment.  He vowed that, if elected, his 
administration would simplify business processes and procedures to 
better serve the public and investors; and would not use regulatory 
systems for harassment and extortion. 
 
No New Taxes 
------------ 
 
¶7.  (U) Despite the growing government budget deficit and his own 
reference to a looming fiscal crisis, Senator Aquino promised there 
would be no new taxes if he were elected.  Aquino said that good 
governance and a strong anti-corruption campaign could reduce 
revenue losses caused by smuggling, tax evasion, and waste in the 
national budget.  He drew strong applause for favoring lower tax 
rates for all, expanding the tax base, and removing exemptions for a 
privileged few.  Aquino said he believed that markets knew best what 
opportunities to target and that he would rationalize fiscal 
incentives if elected. 
 
Infrastructure and Agriculture 
------------------------------ 
 
¶8.  (U) Senator Aquino noted the need to transform infrastructure 
projects from sources of scandal and waste to models of cooperation 
and efficiency; from sources of riches for a few to employment 
generators to boost the economy.  He called for local government 
units to pursue cooperative initiatives with the private sector on 
 
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infrastructure projects with benchmarks to evaluate and monitor 
implementation. 
 
¶9.  (U) The Senator vowed to review all programs of the Department 
of Agriculture to eliminate waste and improve efficient use of 
resources.  He expressed wounded pride that countries such as 
Thailand and Vietnam previously sent their experts to learn from the 
Philippines but now led in agricultural productivity. 
 
Attacks on the Arroyo Administration 
------------------------------------ 
 
¶10.  (SBU) Senator Aquino's speech was peppered with attacks on the 
Arroyo Administration, which he described as overshadowed by 
scandals and driven by self-interest and day-to-day political 
survival.  The Senator criticized government-imposed price ceilings 
on basic commodities following the typhoons of 2009.  He noted that 
when President Arroyo was his Economics professor at Ateneo 
University she had espoused minimal government intervention.  He 
characterized the imposition of price controls on basic commodities 
and petroleum products from late September to mid-November 2009 in 
some typhoon affected areas as a populist move signifying political 
desperation. 
 
Follow-up Questions 
------------------- 
 
¶11.  (U) During a question and answer session following his speech, 
Aquino addressed population policy; the deteriorating education 
system; the Marcos wealth and alleged wrongdoings of President 
Arroyo and her family; and the role his family would play if he were 
elected President. 
 
--  Population Policy:  Aquino responded that he supported further 
discussion on the reproductive health bill, including inputs from 
the Catholic and other churches, but envisioned the role of 
government as reminding/educating its citizenry on responsible 
parenthood without dictating method or family size, and respecting 
individual freedom. 
 
--  Education System:  The Senator noted the need to address the 
classroom shortage and expressed support for increasing basic 
education from 10 years to 12 years.  He called for greater 
cooperation with the private sector in public education and 
reiterated that increased funding for education would come from 
improved revenue administration and congressional discretionary 
funds. 
 
--  Accountability:  Aquino stressed that laws would be upheld and 
that his administration would work to recover ill-gotten wealth from 
prior administrations.  He said he would instruct the Department of 
Justice to investigate allegations of corruption against President 
Arroyo and her family and file the appropriate criminal charges as 
one of the priorities of the first six months of his administration. 
 He also noted the need for judicial reform, citing low conviction 
rates and protracted judicial proceedings; and for using public 
officials' Statements of Assets and Liabilities as a tool for 
holding officials accountable for unexplained wealth. 
 
--  Family Influence:  Aquino joked that his youngest sister Kris 
Aquino-Yap (a well-known media personality) would remain his fashion 
adviser and that his other three sisters only wanted to return to a 
life of anonymity after the elections.  He said he sought to benefit 
from the wisdom of his uncle, prominent businessman Jose "Peping" 
Cojuangco, and other sources but that, ultimately, his decisions and 
actions were his own. 
 
At Ease Before the MBC Crowd 
---------------------------- 
 
¶12.  (SBU) Comment:  Described by some as lacking charisma and 
confidence, Aquino seemed comfortable, witty, and able to think on 
his feet before the supportive MBC crowd.  The similarity between 
Senator Aquino's stated positions and the views of the audience was 
not surprising given that MBC members reportedly played a 
significant role in convincing Aquino to enter the presidential 
race.  Aquino won 61% of the votes in a December 2009 survey of MBC 
members on whom they would elect President.  Interestingly, we heard 
a number of attendees at the MBC speech comment positively on the 
Administration's standard bearer, former Defense Secretary Gilbert 
Teodoro (Aquino's second cousin); but they expressed discomfort 
about Teodoro's close association with President Arroyo.  Teodoro, 
lagging in national surveys, emerged second (14% of votes) in the 
MBC survey. 
 
¶13.  (SBU) Although the Makati Business Club does not reflect the 
electorate of the Philippines, Aquino's revered parents and hopes 
that he can provide leadership for a new economic, moral, and 
political order continue to figure heavily in his commanding lead in 
national opinion polls.  His affiliation with prominent business and 
opinion leaders, including several cabinet officials of previous 
 
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administrations, appears to be trumping uncertainties among the 
Philippine business elite about his relative inexperience.  And 
while MBC members may command relatively few votes, they will be 
substantial donors in the campaign, which officially opens February 
¶1.  End comment. 
 
Bassett